ummins, Inc. (CMI) reports investments in affiliated companies, consisting mainly of investments in nine manufacturing joint ventures. Cummins report 734 million, and provides the following financial information of its investee companies in a footnote to its 10-K report: et sales Gross margin let income (in millions) Cummins share of net income oyalty and interest income otal equity, royalty and interest income from investees Current assets oncurrent assets urrent liabilities oncurrent liabilities let assets As of and for the years ended December 31, 2009 $5,554 1,365 427 $ 196 18 2010 $7,107 1,651 668 $321 30 $351 $2,741 1,253 $214 $2,005 1,123 (1.837) (1,406) (499) (390) $1,658 $1,332 2008 $6,610 1,509 498 $ 231 22 $253
ummins, Inc. (CMI) reports investments in affiliated companies, consisting mainly of investments in nine manufacturing joint ventures. Cummins report 734 million, and provides the following financial information of its investee companies in a footnote to its 10-K report: et sales Gross margin let income (in millions) Cummins share of net income oyalty and interest income otal equity, royalty and interest income from investees Current assets oncurrent assets urrent liabilities oncurrent liabilities let assets As of and for the years ended December 31, 2009 $5,554 1,365 427 $ 196 18 2010 $7,107 1,651 668 $321 30 $351 $2,741 1,253 $214 $2,005 1,123 (1.837) (1,406) (499) (390) $1,658 $1,332 2008 $6,610 1,509 498 $ 231 22 $253
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Analyzing and Interpreting Disclosures on Equity Method Investments
Cummins, Inc. (CMI) reports investments in affiliated companies, consisting mainly of investments in nine manufacturing joint ventures. Cummins reports those investments on its balance sheet at
$734 million, and provides the following financial information of its investee companies in a footnote to its 10-K report:
Net sales
Gross margin
Net income
(in millions)
Cummins share of net income
Royalty and interest income
Total equity, royalty and interest income from investees
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Net assets
Cummins share of net assets
Liabilities 0
As of and for the years ended
December 31,
2009
$5,554
1,365
427
$ 196
x ($ millions)
2010
$7,107
1,651
668
$321
30
$351
$2,741
1,253
(1,837)
(499)
18
$ 214
$ 2,005
1,123
(1,406)
(390)
$1,658 $1,332
$734
$587)
2008
$6,610
(a) What assets and liabilities of unconsolidated affiliates are omitted from Cummins's balance sheet as a result of the equity method of accounting for those investments?
Assets 0
x ($ millions)
1,509
498
$ 231
22
$253
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